Constellation Brands Inc. agreed to sell its Canadian wine business to the Ontario Teachers’ Pension Plan for C$1.03 billion ($780 million), as the U.S. liquor giant focuses more on beer and premium drinks.

Constellation expects to receive cash proceeds of C$750 million from the sale net of repayment of outstanding debt, according to a statement Monday. The transaction, which is subject to the standard approvals, is slated to close by the end of the calendar year, the Victor, New York-based company said.

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The sale marks a change in tack for the business: Constellation said in April that it would explore an initial public offering for some of the unit to strengthen its financial profile. Splitting off some of the wine portfolio makes Constellation more reliant on beer, a division that it expanded with the 2013 acquisition of the Corona business in the U.S. and continued with last year’s $1 billion takeover of craft brewer Ballast Point.

“We seized the opportunity to sell the entire business in a value-enhancing transaction when it presented itself,” said Rob Sands, chief executive officer of Constellation. “The Canadian wine business is the leader in the Canadian wine market and is a long-term growth opportunity.”

Constellation’s shares fell 1.2 percent to $167.39 as of 12:29 p.m. Monday in New York. The stock had gained 19 percent this year as of the close of trading Friday.

Keeping Management

Ontario Teachers’, Canada’s third-biggest pension fund, said it will be partnering with the existing management team at Constellation Brands Canada, including CEO Jay Wright.

The business is “an ideal addition to our consumer portfolio,” Jane Rowe, Ontario Teachers’ senior vice president of private capital, said in a separate statement. “The company is already the undisputed market leader in the Canadian wine industry and has excellent potential for continued growth and value creation.”

Even as it offloads the Canadian business, Constellation is shoring up its lineup of pricier wines. The company announced Monday that it had agreed to acquire the Charles Smith collection of five super- and ultra-premium wines for about $120 million. Constellation also completed the purchase of High West Distillery and bought a minority stake in Bardstown Bourbon Co.

Top Brands

Constellation has called itself Canada’s leading wine company. It owns seven of the nation’s top 20 table wine brands, with Jackson-Triggs ranking as the best-selling label and Inniskillin as the top icewine. Canada’s $9.2 billion wine market is forecast to expand at a 3.9 percent compound annual rate through 2020, according to Euromonitor Passport data.

Constellation acquired the Canadian business a decade ago in the acquisition of Mississauga, Ontario-based Vincor International Inc. for C$1.27 billion.

Constellation, which also sells Robert Mondavi, Clos du Bois and Ruffino wines and Svedka vodka, has sought to move its drink portfolio upmarket by acquiring brands such as Ballast Point and the Prisoner Wine Co., a maker of super-luxury wines that owns the Saldo and Blindfold brands.